Citing last summer’s Supreme Court ruling that P2P companies could be liable for infringement lawsuits if they promoted or encouraged infringing activities, Grokster recently announced that it had ceased distributing its own P2P software.

But that won’t stop people who currently use Grokster. That’s because the software, like many other P2P software packages, accesses a non-centralized file-sharing network. Grokster only distributed software to access that network and the company has no control over what users might trade via the network.

So, if you already have a copy of Grokster’s software, you should still be able to use it. However, for those potential newbies, the window of opportunity has already passed.

“There are legal services for downloading music and movies,” stated an announcement at “This service is not one of them.”

The statement also mentioned that the company would soon launch a “safe and legal service.”

But what Grokster’s Web site doesn’t mention is that the removal of the Grokster software is only part of an agreement to settle copyright infringement claims made by the music and motion picture industries. While yanking the software from its site is relatively easy, satisfying the other part of the settlement may be a bit tougher – paying the motion picture and music industries $50 million.

Grokster’s lawyer, Michael Page, said he believed that the company would have prevailed in a trial, but that it could not afford a prolonged legal battle. However, there are indications that the company needed to put its copyright battles behind itself in order to pursue other ventures.

For example, the company hopes to launch its new service, the copyright-friendly “Grokster 3G,” before the end of the year.

Along with Grokster 3G, the company might also have a new parent, legal P2P company Mashboxx. While neither side has commented on a possible deal, one of the major figures behind Mashboxx is former Grokster President Wayne Rosso. The speculation is that Rosso’s Grokster past will help grease the skids for a Mashboxx acquisition.

Meanwhile, fending off copyright infringement lawsuits seems to be business as usual for other P2Ps such as StreamCast Networks, which distributes Morpheus, and Sharman Networks, the corporate entity behind Kazaa. Lawyers for both companies said that they would continue to fight the lawsuits, and one lawyer, Sharman attorney Charles Baker, seemed to think that the trial could go the distance.

“We think this is going to a jury,” Baker said.

Grandpa Got Run Over By The MPAA

While Grokster tries to make nice with the entertainment industry, the Motion Picture Association of America recently struck a blow in its fight against movie piracy by suing a 67-year-old man who claims that he doesn’t even like movies.

Apparently, Fred Lawrence’s problems started when his grandson downloaded four flicks – “The Grudge,” “The Incredibles,” “I Robot” and “The Forgotten” – via a P2P network. The Racine, Wis., resident said his grandson downloaded the movies out of curiosity and quickly deleted the files. Lawrence also said he already owned three of the movies.

But that don’t mean a thing if you ain’t got the bling to settle with the MPAA, which earlier offered to forget about the entire matter in exchange for $4,000. Lawrence refused, and the MPAA pressed its lawsuit, which could add up to as much as $600,000 in damages if the movie industry prevails.

“First of all, like I say, I guess I’d have to plead being naive about the whole thing,” Lawrence said.